Abstract

http://ssrn.com/abstract=1932596
 
 

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Changing Identity: Retiring from Unemployment


Clemens Hetschko


Free University of Berlin (FUB)

Andreas Knabe


University of Magdeburg - Institute of Economics and Business Administration; CESifo (Center for Economic Studies and Ifo Institute)

Ronnie Schöb


Free University of Berlin (FUB)

September 1, 2011


Abstract:     
Using data from the German Socio-Economic Panel from 1984-2009, we follow persons from their working life into their retirement years and find that, on average, employed people maintain their life satisfaction upon retirement, while long-term unemployed people report a substantial increase in their life satisfaction when they retire. These results are robust to controlling for changes in other life circumstances and suggest that retiring is associated with a switch in the relevant social norms that causes an increase in identity utility for the formerly unemployed. This is supportive of the idea that, by including identity in the utility function, results from the empirical life satisfaction literature can be reconciled with the economic theory of individual utility.

Number of Pages in PDF File: 31

Keywords: life satisfaction, retirement, unemployment, identity, social norm

JEL Classification: I31, J26

working papers series


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Date posted: September 23, 2011  

Suggested Citation

Hetschko, Clemens and Knabe, Andreas and Schöb, Ronnie, Changing Identity: Retiring from Unemployment (September 1, 2011). Available at SSRN: http://ssrn.com/abstract=1932596 or http://dx.doi.org/10.2139/ssrn.1932596

Contact Information

Clemens Hetschko (Contact Author)
Free University of Berlin (FUB) ( email )
Kaiserswerther Str. 16-18
Berlin, Berlin 14195
Germany
Andreas Knabe
University of Magdeburg - Institute of Economics and Business Administration ( email )
Universitaetsplatz 2
Magdeburg, 39016
Germany
CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany

Ronnie Schöb
Free University of Berlin (FUB) ( email )
Kaiserswerther Str. 16-18
Berlin, Berlin 14195
Germany
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